The market value of Ettington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase materialy once the remaining term is less than eighty years
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Ettington,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ettington valuers.
Jonathan was the the leasehold owner of a conversion flat in Ettington being sold with a lease of fraction over fifty eight years outstanding. Jonathan informally spoke with his landlord being a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Jonathan to invoke his statutory right. Jonathan procured expert legal guidance and secured an acceptable resolution informally and sell the property.
In 2014 we were approached by Ms Y Scott who, having purchased a newly refurbished flat in Ettington in January 2010. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar flats in Ettington with 100 year plus lease were worth £285,000. The mid-range amount of ground rent was £55 collected every twelve months. The lease ran out in 2105. Having 79 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including expenses.
In 2014 we were e-mailed by Mr and Mrs. R Girard who, having purchased a first floor apartment in Ettington in August 2011. The dilemma was if we could approximate the price would likely be to prolong the lease by an additional years. Similar flats in Ettington with a long lease were in the region of £193,400. The mid-range ground rent payable was £65 billed quarterly. The lease finished on 14 February 2085. Taking into account 59 years remaining we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 exclusive of expenses.